US Postal Service cut: Do we really want another bailout?

US Postal Service cut: Its retiree health-care program on the brink today. Entire USPS broke by early next year.

By
Douglas French, Guest blogger /
September 5, 2011

Ben Margot/AP

(Read caption)
U.S. Postal Service spokesman Gus Ruiz gestures beside mailboxes awaiting disposal this past Thursday in San Jose, Calif. Because of steeply declining use, the USPS has removed more than 60 percent of the blue boxes. Declining first-class mail volume will make the USPS broke by early next year.

If we do nothing, if we don’t react in a smart, appropriate way, the postal service could literally close later this year. That’s not the kind of development we need to inject into a weak, uneven economic recovery.

Fannie, Freddie, GM, AIG, and now the U.S.P.S. Keeping another zombie alive with tax dollars or money from nowhere, is exactly what the economy doesn’t need.

The most urgent $5.5 billion that’s needed is to finance retirees’ future health care. So we’re not talking about the post office needing the dough to gas up the trucks or even pay current employees. Taxpayers are needed to pay the cost for mail that was delivered years ago.

But, it won’t be long (early next year) before the agency will run out of money entirely.

Mail volume has dropped 22% from five years ago, and it won’t be coming back. However, trimming the labor bill at U.S.P.S. is problematic. “We’re going to fight this and we’re going to fight it hard,” said Cliff Guffey, president of the American Postal Workers Union, which represents 207,000 mail sorters and post office clerks. “It’s illegal for them to abrogate our contract.”

Labor costs amount to 80% of the U.S.P.S. expenses, while at UPS labor is 53% of expenses and at FedEx labor is only 32% of expenses. If either of these companies were having trouble paying their bills, it’s doubtful Congress would lend a sympathetic ear.

Instead of winning customers by offering better service, the postal service is lobbying Congress for approval to discontinue Saturday mail delivery. This just continues a trend that began years ago. No matter what technological innovations are developed, the U.S.P.S., as James Bovardexplains,

still delivers mail roughly the same way it was delivered in ancient Greece, when Herodotus coined the phrase, “Neither snow, nor rain, not heat, nor gloom of night stays these couriers from the swift completion of their appointed rounds.” The service downplays this motto these days since a few inches of snow or a frowning schnauzer can stop delivery for days. As postal expert John Haldi has concluded:

Despite the many advances in . . . mechanized handling technology, the Post Office’s chief accomplishment over the last 200 years has been limited to the introduction of durable, lightweight, colored nylon bags for use with airmail.

Before 1950 the mail was delivered twice a day, or a dozen times week. Soon postal customers can look forward to just five deliveries a week. Unless there is a holiday, of course.

Bovard describes the postal service as “probably the worst managed and one of the least honest corporations in America.”